China’s central bank injects 50 bn yuan into market

Seeing the depletion of market in the recent days, Central Bank of China has decided to inject money in the market. China’s central bank elevated 50 billion yuan ($7.85 billion) into the money market via reverse repurchase agreement (repo) on Tuesday, the first cash injection by the China this week.

The yield for the seven-day reverse repo attain at 2.35 percent according to a statement of the People’s Bank of China (PBOC)., Xinhua news agency quoted the Bank of China’s (PBOC) statement as saying.

Under a reverse repo, the central bank purchases securities from large banks and brokerages with the agreement to sell them in the future as an effective means to tackle short-term money shortages in the market.

The cash injection will offset the effects from earlier reverse repo due on Tuesday.

Given a stable renminbi (RMB), the money shortage was greatly eased in September and the PBOC’s operations were smaller than those in August.